A proxy battle will allow shareholders to vote on a change in management of the company they have bought a stake in, and is also a method activist investors use to bring about the change they want, as they can convince shareholders to vote in their interests.

Further complicating matters is the fact that Canadian Pacific has repeatedly asked Ackman to join their board of directors (the offer still stands) —yet Ackman has publicized that the offer to join the board comes with a "standstill agreement" which strips him of basic shareholder rights, criticizing it as a ploy to stop his activist advances since no other board member has been subjected to that catch.

Ackman is known for taking up majority stakes in undervalued companies and then turning around management to increase the share value. When Pershing Square's 14% stake in Canadian Pacific was revealed last October, the company's stock jumped 5%. Today, shares had fallen to $68.08 from an open of $68.78 around 1 p.m. — when Bloomberg reported Ackman's declaration of a proxy battle to install Harrington as CEO. Since then, it has now jumped to trading around $68.99. Seems like investors are in Ackman's favor.